Copyright Board Delivers Judgment in Mega-Compulsory Licensing Dispute; Fixes Royalty at 2%

The long running compulsory licensing dispute between radio stations and copyright societies has finally concluded, with the Copyright Board fixing the royalty at “2% of net advertisement earnings of each FM radio station accruing from the radio business only for that radio station shall be set apart by each complainant for pro rata distribution of compensation to all music providers”. Para 25.13 of the Order states that the current published tariff of PPL is Rs. 2400 per needle hour or 20% of the net advertising revenue, whichever is higher. Apparently even PPL’s expert witness, Prof. Laroyia stated in his cross-examination that the rate of Rs. 2400 per needle hour was “exorbitant and unreasonable”. The Order of the Copyright Board has been loaded on the SpicyIP website over here.

This dispute has had a long, troubled history with litigation before the Bombay High Court, the Delhi High Court and eventually the Supreme Court of India. An earlier Order of the Copyright Board, which is available on the fabulous India Kanoon site, was set aside by the Supreme Court due to irregularities in recording evidence. In pertinent part the Supreme Court stated “However, we do not approve the manner in which the Board has dealt with the matter. It has refused to examine the witnesses. It took up the matter on a day for hearing which was fixed for production of witnesses. We, therefore, are of the opinion that the order of the Board should be set aside and the matter be remitted to the Board again for the consideration of the matter afresh on merit.” The panel hearing the dispute was thereafter re-constituted and this time the Copyright Board allowed both parties to carry out extensive cross-examination of all expert witnesses, albeit after a slight nudging from the Delhi High Court.

Section 72 of the Copyright Act, 1957 provides a statutory right of appeal to the High Court against the Order of the Copyright Board. Given the stakes involved in this dispute it is almost certain that the copyright societies will appeal this decision to the High Court of Delhi. However given the damaging admissions by PPL’s expert witness it is very likely that PPL will file a writ petition seeking to get the entire proceedings quashed on the grounds that the Chairperson of the Copyright Board is not qualified to be Chairperson. This would give PPL a chance to redo its evidence. PPL could also challenge the very constitutionality of the Copyright Board itself. We had blogged about these possibilities over here and here.

In either situation this dispute promises to be a pot-boiler and we’ll keep you posted on any further updates.

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

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